ethical issues with cost allocation 1
Read the following in Chapter 2 of the Fundamentals of Cost Accounting text:
- Exercise 2-34, “Cost Allocation—Ethical Issues,” page 67.
After reading the exercise, respond to the following prompts:
- How would you recommend Star allocate the common costs between drinks and pastries?
- You are the assistant manager and have been working with Star on the allocation problem. What should you do?